Emerging Best Practices of Chinese Globalizers

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Among China’s largest enterprises, “going out”—or globalization—is a central theme of business. Chinese companies are increasingly establishing operations in overseas markets. Along with this expansion comes the requirement to engage directly with local communities and improve them through corporate citizenship activities. However, the traditional view is that corporate citizenship will have a negative effect on corporate profits. As a result, Chinese companies need to reconcile these two imperatives when they go global.

Unlike early forms of philanthropy—such as cash donations, often pledged in the wake of a natural disaster—the innovative solutions many Chinese companies are developing align corporate citizenship and business strategy. These companies are able to match local needs with their core business strengths, yielding better results for communities as well as new business opportunities. Structured the right way, these efforts can actually drive revenue—and thus be sustainable over time.

To identify Chinese Globalizers with noteworthy corporate-global-citizenship practices, the World Economic Forum and The Boston Consulting Group analyzed 95 of China’s largest international companies. The project team also talked to more than 130 senior executives, researchers, and citizenship experts. This is one of the most comprehensive studies of citizenship among Chinese Globalizers yet. The results—published in the report Emerging Best Practices of Chinese Globalizers: The Corporate Global Citizenship Challenge—indicate strong progress and innovative citizenship efforts among Globalizers.

To promote these practices, the report highlights three major challenges that have prevented other companies from achieving similar successes. First, some Chinese companies lack a thorough understanding of corporate citizenship and assume—incorrectly—that it can benefit local communities only at the expense of shareholders. Second, some companies are reluctant to share citizenship-related information. Finally, a lack of innovation among Chinese companies reduces the effectiveness of their citizenship efforts.

Addressing these issues, the report enjoins companies to adopt a culture of citizenship, share information more freely, and develop more innovative approaches for engaging with overseas markets. It also provides five practical recommendations for Chinese companies and calls for support from the Chinese government in order to build on this progress.

To Contact the Authors

  • Ted Chan
  • Partner & Managing Director
  • Hong Kong

 

Source: BCG Perspectives – 13 March 2012


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